The Brand Builder's Playbook // The Science of Brand ROI: Measuring What Matters with Raja Rajamannar (Mastercard)

25:23If you want to go, here are people who are staffing those kiosks, so to speak, outside our boardroom. And my team enthusiastically shares what's happening. And that gives a lot of confidence to the board members that they have visibility into what is happening. We don't duck any questions. We don't agree just because it is easier to agree with their point of view. And if we are disagreeing, we'll tell them why we are disagreeing and what is the rationale behind the whole thing. And it's a journey. And today I feel that we have got an extremely strong support from the board and that they love what we are doing in marketing.

26:02And that's a huge help. And the same thing is true for the CEO and his direct reports, so are my peers, where we have done things like, you know, putting them through the motions of how we create a campaign or how we do a media plan or how do we plan, you know, anything to do with some event or whatever. When they get that experience themselves a little bit hands-on, so to speak, suddenly there is a lot of newfound respect for what marketing does. And that it's not just common sense. It's not simply telling your agency, hey, go and do it. They do it and And we are sort of, you know, claiming credit for it.

26:35It's not that way. And then they see it. So I would say that's a journey. Very interesting. You've been in this role a long time, 13 years. You've been up and down with several economic cycles. Right now we're in a nice surge in the stock market, but, you know, nothing lasts forever. Does your approach change when we're in a tougher down period, a tougher economic cycle? Does your approach to marketing change? Do the things that you measure change? Does your thought about ROI get more intense or is it always intense? So the reality is there is always a lot of accountability for every dollar that is given to marketing.

27:09So that expectation and the intensity of expectation doesn't change, particularly when there is an economic downturn. And if the company's revenues are under pressure, there is a lot more intensity on marketing. Now, if we cannot justify our marketing investments as delivering results for the business, it'll be very difficult to hold on to our budgets. So therefore, what we do is extra diligence to demonstrate what we are giving a return for the investment we are getting. So to basically connect the dots between marketing investment and business outcomes in a credible, believable fashion. So this is one part of it.

27:46Second, what I always find is when there is a downturn, you don't go and start selling things to your customers or consumers. That's the worst time because in the downturn, everyone is under pressure. So there are times to sell, but these are the times to serve the consumers. And if you were to say, for example, if you say B2B marketing, if my outreach to our clients and prospects is, hey, we are here for you. If you need anything, we are here to support you in every which way. If you need flexibility on some stuff, we are here to take care of that. Or if you want to share some of our assets or sponsorship assets, we are happy to make because we understand that you're also under budget pressure.

28:29And so we go in that kind of a fashion. And the first time, you know, we have said the biggest one was around the COVID situation. Same thing we do with our partners. So we sponsored a ton of things. And when COVID happened, most of the sponsorships could not even do anything. So many companies have either walked away from the sponsorships or they said, look, you have not delivered, therefore we are turning the tap off. What we said is, let's discuss and see how we can work together. Because they don't want to fire everyone on their teams either. So that takes money. So we said, okay, let's think about how we can actually restructure our deal in a manner that after the COVID or whatever is the pandemic is behind us, how we can actually collaborate.

29:17And I'm willing to give you some value now so that you can sustain yourself. And it was deeply appreciated. And for the consumers as well, we take a very non-salesy approach and we try to give them solutions which will help them in their circumstances. And so that's how we approach. And it did make a lot of difference. And in fact, I heard particularly for me, what was most compelling was the B2B marketing during that time. Because we understood exactly what they were going through and they knew that we understood the situation. We were empathetic. We were very supportive and collaborative. And that paid off in oodles when we came out of the pandemic.

29:56Now, we talked a few minutes ago about your market cap growth, incredible growth since when you started 13 years ago. What have you seen regarding brand-related metrics in terms of questions analysts and your investors are asking? What are they paying more attention to than they did 13 years ago? Are they more interested in brand, less interested in brand? So what's the state of that? So from the analyst's point of view, they have got certain thoughts in their mind. Like, for example, in a world where there is so much of trust deficit and in a payments kind of a situation, trust is very critical.

30:32It's at the bottom of it. It's at the heart of it. They want to understand how are we doing on brand trust? Are people trusting our brand? And is it different and ahead of our competition, for example? That matters to them quite a lot. Number two, they also want to understand what is sustainable and differentiated into the future that our brand stands for. Like, for example, they say the future is going to be with Gen Z, millennials, alpha, call it what a Gen alpha. How are you actually appealing to those people? Because our brand is more than 60 years old. So they understand clearly for the regular middle age and above, we are doing fantastically as a brand.

31:13but they want to understand how we are doing for the future generations. The good thing is we have anticipated these quite some time back, and we got into areas like electronic dance music. We have got into areas like e-sports in a big way. All these have really got us a lot more into the younger population than ever before. And we show that difference and how the trajectory has been over the years. And they're sincere, they truly appreciate it. Likewise, they talk about things like, you are known to be a payments technology company. But everyone knows MasterCard is this. But now you're very big in things like cybersecurity.

31:49You're big in loyalty services. You're big in areas like fraud detection and management. So in each one of these areas, how is your brand getting to be known so that when a salesperson goes to a particular company, because the target audience is very different now. For example, to sell cybersecurity, we don't go to the head of cards business, which is what traditionally we used to do to sell our wares. Now we have to go to the CISO or CIO or whoever it is. So our target audiences are changing and we actually demonstrate to them, here are the various target audiences. This is how we used to go before.

32:24This is how we are building our brand equity, we call the brand image, in their minds and then give them a sense of confidence and comfort that our brand is well positioned in this kind of a space. So analysts are absolutely asking these questions about the brand. Roger, it's interesting. you talk about today's customers and then going after tomorrow's customers. How do you think about ROI for short-term versus long-term? Are there some rules of thumbs of how our listeners can think about that math? So there are two things. When I look at ROI, I look at less about brand and more about performance marketing, right?

32:59And both those have to be working in tandem together. So when you look at, like, for example, I can't say I ran one campaign, and this is how much my brand has moved. So brand movements take place over a longer period of time than just a campaign. Yes, the brand decline can happen in an instant. So for brand decline or brand reputation measurements, we do it in real time. So for example, let's say when we went to the F1, we could actually see an immediate jump in our brand reputation as a tech driven company, technology driven company, because of the entire space there. Or if there is some crisis, God forbidding, that reputation takes a hit in an instant.

33:39So brand reputation, we measure continuously and on an ongoing basis. The rest of the brand image and brand affinity and all these metrics that we have got, they are more longer term. We measure them once in a quarter just to think about it directionally, and we get a little bit more quantitatively fixed on an annual basis. How are we doing? How have we done this year compared to the previous years? and where do we want to be next year? So that's how we look at the overall brand. For example, we want to raise funds for a particular program. It doesn't have to be only for the social good. We do a ton of other things as well.

34:16And in those cases, the result is the direct measure of the campaign effectiveness or lack thereof. We talk about, for example, B2B. We have got a whole 360-degree campaign around money 2020, which is happening in Vegas. Did we win any new customers? How many leads have we generated? How many of those leads have been marketing qualified and then sales qualified? What was the conversion like? What was the average size of the business that we got? And therefore, Money 2020, as an example, was it worth our participation? We spent so much money, this is what we got. And when I say what we got, we also measured the lifetime values of these relationships.

34:56So B2B is extremely simple from that point of view to measure the short-term ROIs. On the B2C, there are some like spend enhancement programs. Suppose we launched acceptance of MasterCard at a metro, and we want to see that there has to be a lift because we paid a lot of money to make that entire infrastructure. We stand it up. And from that point of view, if nobody is using it or there is not a significant jump, its waist and I have to measure it in real time. So those are the kind of things that we do. And it depends upon the type of objective. Some are short-term and immediate, some are a little intermediate, and there are brand-specific ones which are more long-term.

35:38Raja, you mentioned when we started talking that you look at the attributes that you care about in terms of brand attributes and you measure those. I'd be curious, I think it will help our audience to know, So is there a framework or methodology you use to track brand ROI? Are there platforms that you leverage, tools that you leverage? Because you're very good at this. And I just wonder what our listeners and audience could learn from how you approach your methodology and your framework of thinking. So what we have done, Jim, first and foremost, we leveraged our internal data analytics resources quite substantially.

36:15Now, MasterCard, if I remember it right, have got about seven or eight data analytics companies that it acquired. And they are incredibly, incredibly detailed and insightful in terms of how they do the protocol ROI. Not just ROI, but every type of data analytics that is data analysis that is done. So what we did was we started partnering with them and say, OK, if you start at the base level, there is the market mix model. Now, how good is the market mix model? Where are the gaps? Given that we have the kind of data which, for example, a packaged goods company doesn't have in real time, how can we incorporate our things into those models to be able to get dashboards almost on a weekly basis or on a campaign level basis?

37:02So we started evolving and creating a ton of proprietary data. Second, we also look at doing a lot of regressions. So regression analysis, where basically we say, okay, we have run these, these, these. this is what it has resulted in by way of results, how much of it is because of what we have done versus because the gasoline prices have gone down and people had more money and they were spending it. So the attribution aspect of it, we have really, I would not say perfected into an art, but we moved in that direction pretty substantially. So we know what is because of us and what is happening because of just the environment.

37:39So that's one thing. So the causal relationship and a credible attribution is something which we have focused quite a lot on. That's number two. Number three, there are some metrics which did not exist that we could pick it up off the shelf. So we started looking at some. So for example, ironically, I worked in a health insurance company before I joined MasterCard. It's called Humana. At that time, there were some studies which were shown that health insurance companies in the United States were the most hated category. Even if you have a wonderful brand, you're in a very bad category from a consumer perception perspective.

38:17The one which was next to that was credit cards. So when I made an improvement from number 20 to number 19, we were still in a very bad quadrant as an industry at the point in time, because the misperception that people have about companies like MasterCard is that we are credit card companies. We don't issue a single credit card. We are a technology company, which will make it available to any bank. and the banks may charge and collect whatever they would want to do. But because they see the MasterCard logo on the card itself, they immediately say MasterCard is charging interest or they are actually driving me into debt, which we don't do any of that.

38:55But perception is reality. So there's a negative perception about the whole category. So we had to bring in something what we call as brand affinity index. So how do we change from being one of the most hated categories? We are a good brand in a bad category, so to speak, to really move the needle and say, you know what? MasterCard is move it away from being a credit card company to being perceived as a payments technology company and so on. And we feel terrific in terms of how much of movement we have made. And that required us to do things which are out of the ordinary, like our partnership with Stand Up to Cancer Foundation that raised so far about$75 million.

39:34And we have helped in the, we didn't do it, of course, but it's stand up to cancer people. But we help them in terms of some of the methodologies of drug discovery and so on, which resulted in discovering nine drugs from molecule discovery all the way to FDA approval that have happened in the last 12 years or so. And there was also a discovery of early detection of ovarian cancer, which we actually enabled through our funding and our interactions with these folks and with the various researchers. So what happens is we then tell the story at a place like MLB All-Stars or World Series, right, where there is a stand-up to cancer moment.

40:17It is not a MasterCard moment. It's a stand-up to cancer moment. And they say, we are standing up for somebody to write the name off on the placard that they are standing up for in their fight against cancer. One of the most deeply moving and touching what you call occasions and people, they start looking at it and they say, yeah, this is what MasterCard is doing. It changes the perception and shifts it into a real positive, warm territory. And this is not just in a superficial manner because we do it year after year consistently. And this is not about using them as sound bites for our CEO to talk or for any one of us to make in conferences, but this is the walk that we are really walking.

41:00And that's something which is giving. So we do a ton of stuff like that. So as a result of which now I can say that at least a half a dozen major global programs we are running that are good for the society and seen as being driven by MasterCard or enabled by MasterCard, which changes my brand scores pretty dramatically in a positive way. Good for society. I'm sure you've seen there's been a lot of criticism over the last few years on purpose driven marketing. And can you really get an ROI on that? Can you comment a little bit about that? Absolutely. This is something which I feel very strongly about.

41:33Purpose and profits are not mutually exclusive. You pursue your purpose methodically, thoughtfully, smartly, and innovatively. So long as you're able to connect the dots back to your business, profits will follow. And you can give any number of examples. Let me just go back and tell you about this stand-up to cancer itself, right? I said we have raised$75 million and we run the campaigns. It costs quite a bit of money. the way we raise this money is very simple. We say that during these eight weeks in summer in the United States, use your MasterCard at particular category of merchants, like say restaurants, instead of some other product.

42:14Your price remains the same. Whatever you are paying the bill at the restaurant doesn't change just because you're using a MasterCard. You're just substituting whatever else you are using for MasterCard. We contribute a small portion of our profits from that transaction to stand up to cancer, which adds up to about$4 to$5 million per year. And this is what has come to about$75 million so far. Now, what happens is when we run this, during the period, assuming that the restaurant category is growing at 8%, MasterCard's growth happens to be at 14 % during this time. After the promotion ends, it comes down, but it settles higher than 8%.

42:52That differential between 8 % and say 9 % is where we have settled, compensates me fully, pays me back fully for the money I'm giving to Stand Up to Cancer. So we have got permanent market share gain on an annual basis within the year, within the accounting year. I have totally recouped my investment through revenues. This happens again and again and again. We have done it with Priceless Planet Coalition. We have done it with World Food Program. We're doing program after program after program and it pays off. All right, and I'm going to end with one question, then I want you to wrap it up. And we're going to let Raja go.

43:29This is a fabulous discussion. I've heard you say in other venues, Raja, that marketers often don't speak the language of business. And you kind of referred to that earlier in the show. From all of your experience and all the organizations you've been involved with, like the ANA Growth Council, what should CMOs be doing or learning or unlearning to really earn the trust of their CFO, their CEO, and the board at large. What's your advice? I think that's such an important topic that it should be on the top of a CMO's agenda. Firstly, if they are not very conversant with numbers, with financials, they need to have somebody who is their right-hand person who will help them understand and craft a narrative using actual numbers.

44:15You need to talk the language of the CFO and the CEO. If you have to get their alignment with whatever you are doing. Otherwise, you are talking your own marketing jargon. You are living in your own fringe world. You will really never cut it through with these people. And this is what I always tell. You don't have to be an engineer or a quanti whiz kid, but you can have somebody like that on your team who can actually help you and focus you on the stuff that you need to have, number one. Number two, some people have the head for numbers. Some people don't have, which is okay. In which case, don't have the insecurity to put your quantitative person in front of the board, but be present there.

44:55And also, and interpret and appropriately intervene and tell, hey, this is what this guy has shared the numbers with you. Let me tell you the qualitative story of it and why it matters and so on. When you tag team in that way, I think it takes it to a different level. Now, I'm fortunate. I'm a chemical engineer and I'm a nerd. So I don't need somebody else to help me. But still, I have my CFO. The reason I have is the same truth told by somebody else other than a marketing person about marketing has more credibility. So if somebody else is tooting your horn, it's much more productive and powerful than you telling these things.

45:33So I would always say that you need to have a representative of the CFO on your team. And the CFOs will be delighted to do that because for the first time, they will be getting insights into or behind the curtain what's happening in marketing. They will know, they want to know, not to just cut your budgets, but they're genuinely curious and inquisitive as to what's happening with all this money. I'm giving these guys or these girls millions and millions of dollars. I just need to know how they are spending it. And typically marketers are a little closed because the perception is if I open the door, they take away my money.

46:05That doesn't have to be so. I would say that's what it is. So firstly, have confidence in yourself that you are doing the right thing. Number two, have somebody who understands quantitative stuff on your team, financial stuff on your team. And number three, you need to look at it as a campaign. Now, we do marketing all the time for our company, for our products, for our services. What about marketing our own function? If our audiences are the CEO, CFO, the C-suite and the board, you know what they're looking for. You need to understand and then tailor your message to them and give appropriate proof points as to why they should believe your story and your golden.

46:45I know I'm oversimplifying, but this is exactly what it is. No, no. And this idea about having a meeting with your CFO and agreeing on a person to report to you and the CFO whose job is to help you improve the ROI of marketing. I did the same at P &G in my first early days in the job. We weren't where we needed to be an ROI. I talked to the CFO about it. He'd loaned me a director. The director reported to the CFO and me. Met with the CFO every week. And so we were united in solving the problem. and we made massive progress. Love it. I think Raja just gave us a masterclass on how what's taking somewhat an intimidating topic and make it a two-way street between CFO and CMO, right from the beginning conversation with the watch and having real numbers to bring it in.

47:31So thank you, Raja. Really appreciate all the insights for our listeners. Thank you, Ryan. And thank you very much, Jim. Really appreciate. Well, welcome back, Kate. I'm enjoying my coffee. I hope you enjoyed your coffee after that riveting conversation. It's always riveting with Rajah. You never know where it's going to go, but it always goes to good places. So what was your take after relaxing and listening to that? Ryan and I were trying to get the best knowledge out of him that we could. You're listening to it all. What do you think? Well, first of all, I feel like you could have kept going for a long time.

47:59But there were a couple of things I really loved. And honestly, I'm going to steal one of them. And it's his opening example about the Cartier watch when he needed to convince people that brand mattered. I have a lot of watch people in my orbit, and they love watches. and I think they love them so much that they forget how much of it is just wrapped up in the brand and yes there are technological differences and more sophisticated and less sophisticated but it's such a good example of a product in a very mature category where tons of differentiation lives in that brand and I also loved how many times he referred to the power of data having good real-time data that could show you fairly quickly as things were changing and I love that even though in some cases the data was anonymized, it didn't take its power away.

48:44You don't have to deny consumers dignity and privacy in order to really to serve them better, given the data that they have. So I really love to love to hear that conversation because I think sometimes that's lost. Ryan, did you like the data part as well? What about you? What was your takeaway? Roger just gave a phenomenal masterclass on so many things that I loved, but I think the message just simple. For success today in brand building or being a marketer, you have to tie brand to business metrics. And I love that you need to be proactive in starting a dialogue with the CFO to help bridge the gap between marketing and finance.

49:22If you do not, you will probably have budgets dictated to you. You will have a secondary role in building brand and business. And I love the eloquence of how he brought it and made it fun to Kate's point of simple. You don't need to use overcomplicated components to get a CFO to understand that brand is in fact an asset and not an expense. Now we have two traditions in the show. We always open with the playbook that we admire before we start the show. And we always end with what we recommend listeners. What should they add to their playbook from this episode? What did they hear that they might say?

49:58I got to add that. I've got to question that. I've got to supplement that. So Ryan, if there's one thing from this episode that you would like our audience to add to their playbook, what is it? Yeah. Whether you're new to the role or seasoned, do not wait for bad times for an activist investor for M &A activity or a recession to begin to prove brand's contribution to the bottom line. I'll also add that there are many components of measuring brand's contribution. And it's your duty to constantly remind folks that even though it doesn't show up in the P &L in many countries, it shows up in our pricing power.

50:35It shows up in our ability to tickle the heartstrings of our customers and keep them loyal. And it shows up in ways that attract employees to want to come to work for companies. It's not just external, it's within. Kate, what about you? I love what Ryan just said about staying ahead of this. When you start doing it reactively, it's going to be a scramble. But if you do it always, then you're really signaling that this is part of how business works. What I would add is this idea that you can bring everybody in the organization onto the marketing team in a sense. And so if I were in this kind of position, I would take that idea of creating these experiential exposures to the marketing process and walking everybody through them.

51:19Honestly, from the person at the front desk to your board members, help them all understand why you're making the choices that you're making and why they make a difference. All of a sudden, everybody is on your team. And very often, I think marketing kind of lives behind this smoke and mirrors idea. Those are the creative people over there who knows what they're doing. When you really explain the decisions, I think you get a lot more power from the entire organization. And we know the truth is everybody is marketing all the time, whether that's in their job title or not. I would like to add to that.

51:51So while ideally brand is owned by the CEO down as its most important asset, as marketers, when you enter an organization, it's interesting to see how quickly you can see how to break down the silos of the other lines of business. And so what you're saying, Kate, is really showing how every line of business plays an important role in nurturing and growing that asset we call brand. Yeah, I love where you're both going with this. And my takeaway is totally consistent with what you're saying, I would be very practical. I would share this episode with my CEO and CFO and ask them for their reaction to it and then ask them for their support in driving the financial value for the company through building their brand and ask for their ideas.

52:34You'll have your own opinion about where you are on that journey. They will as well. And if the three of you come together on where you are and what are some ideas to improve that, just good things will happen. There's zero downside. and so much upside in that. Okay. Anything else, you two, before we wrap up for this week and get ready for next week, part five? So that's four down, Jim. We're halfway there. Very much looking forward to the next four. You keep finding the most interesting people, so I wouldn't want to step away from it. Okay. Well, that's it for this week's playbook. Please join us next week for another episode in the Brand Builders Playbook.

53:10We'll see you then. Thanks for listening to the Brand Builders Playbook, where we explore the real strategies behind resilient revenue-driving brands. If today's conversation sparked new ideas or helped you see things differently, do us a favor, follow the show on your favorite podcast app, leave a review and give us a like or rating. It really helps others find the show and keeps our conversation going. And if you know a brand leader or marketer who needs to hear this, share this episode with them. And don't forget to check out the worksheets in the show notes. We'll be back next week with more insights, more playmakers, and more of what it takes to build brands that last.